Pros and Cons of Rebranding Samsung

Samsung is considering two alternative methods to revamp its brand image globally: product differentiation and rebranding. The first method involves focusing on innovative products with unique features, which was successful in the past when Samsung shifted its strategy from a cost-focus to product differentiation under Eric Kim's leadership. This approach led to increased sales growth of $15 billion in one year. The second method is rebranding, which may or may not succeed due to unpredictable changes in consumer taste and preferences. After analyzing both alternatives using qualitative and quantitative methods, it seems that alternative-1, focusing on product differentiation, is the more positive and effective approach for Samsung.

Running Head: Samsung Global Marketing Operation 1
Samsung Global Marketing Operation

Running Head: Samsung Global Marketing Operation 2
Introduction to the Case
This is a case study discussion of Samsung Electronics Limited where we will look at the key
issues and challenges that Samsung has been facing over the period of time in its global
operation.
The purpose of this case study to provide answers to the question of “How can Samsung be a
successful global brand?” The case study analysis includes discussion on existing issues and
challenges, solutions available for the challenges, selection of the best possible challenge and
finally, the development of strategies to implement the solution.
Key Issues or Challenges
Samsung Electronics ranked as the NO.1 Valuable brand in 2003 by Business Week’s annual
magazine. Samsung is among few entities all over the world who has market valuation $300
billion USD. It is also the only South-Korean company to be listed in Top 100 brands of the
world. The company covered the journey of making black and white television to the smart
phone, smart watches, and many Artificial Intelligence (AI) elements. This company also
offers other electronic items such as refrigerator, oven, computers, VCRs etc. it has gone for
diversification for expanding its operation. (Baloh et.al,2008)
When an organisation goes for expansion, certainly some issues and barriers will fall in place.
The challenges may be with respect to product, service, operation, marketing, human
resource, environmental pollution, technological limitation etc.
For Samsung, currently, these are some of the key challenges they are facing to compete in
the market-

Running Head: Samsung Global Marketing Operation 3
In the international market, the regional competitors are taking market shares of the company
and rapid changes and market penetration of mobile industry.
Justification-
The first challenge is major because of the growth of Chinese and other regional mobile
brands such as Oppo, Huawei, Asus, Apple, Vivo, and Motorola. As the countries are looking
for keeping the revenues in the homeland, they have started promoting inland product and
services than outsourcing, this is bringing more and more mobile and electronic companies to
start their operation and then go for global expansion. It is making the buyer’s bargaining
position stronger to force Samsung to keep the profit level as lower as possible.
Alternative solutions
Alternative Solution-1-Product Differentiation focused strategy
Samsung traditionally was having a cost-focused strategy where the minimisation of cost was
given more importance than anything else. Then, the motive was to sell the best quality
product at lower or the best in the industry but in future, the strategy will shift to product
differentiation strategy. (Urbinati et.al, 2017)
Product differentiation strategy is a generic strategy that aims at making the differentiation
in product and service offerings for the market. The differentiation is not only the added
features but also includes disruptive innovation or radical innovation in the existing industry.
(Moon et.al,2011)
Pros of the alternative-1-

Running Head: Samsung Global Marketing Operation 4
 Product differentiation will help the customers to locate identifiable difference in the
existing offering. Differentiation may fulfil the latent need of society people.
 Differentiation if noticeable and understandable, it will give economic benefit to the
company as the consumer won’t hesitate to pay more for a new or improved product or
service.
 Differentiation focused strategy covers the scope for mass customisation that will lead to
apply new technological solution for upgrading or bringing new product. (Lewandowski
et.al, 2016)
Cons of the alternative-1
 Since the company is dealing with electronic components, differentiation identification
may not be found by regions having low-level digital literacy.
 The government may pose restrictions on the sale of such product in own region due to
fear of market loss of local brands (China most probably)
 Copying technology is a trend in the technology market by showing a minor difference.
Alternative-2- Rebranding
As per the Company’s market study on the consumer, they found Samsung has been taken as
a not so flashy or attractive brand like Apple or Sony. Most of the people viewed it low cost
and tech-savvy product however majority are not sure about internal technology, designing
and its utility at max which is why people are unable to relate with Samsung Product.
The alternative strategy is focusing on reinforcing existing product line brand image among
the consumers (both existing and future). (Ghemawat et.al,2012)
Pros of rebranding

Running Head: Samsung Global Marketing Operation 5
 Reinforcement of brand image will bring new customers into its business. (economic
benefit)
 As the product of Samsung will be shown in a new way such as presenting the uniqueness
of the product or its unidentified utility etc., it will change the way customers were
looking earlier. (technological)
 It will create a new brand personality where the brand connects with people. (social)
Cons of rebranding
 Too much spending on ad campaigns may cost the company. (economic)
 Rebranding may or may not align to existing offering thus can have a reverse effect.
(social) (Allwood 2014)
Identify the best alternative
In the above, we discussed two alternative methods to revamp the brand image in the global
scenario. To know the strategy which Samsung should go for can be studied by qualitative
and quantitative analysis.
Quantitative analysis
Alternative-1-
Pre 2000 era i.e. before Eric Kim joined Samsung as Marketing Head, the company was not
having product differentiation and also considered a 3-tier commodity brand. After joining,
Kim focused more on upcoming technology i.e. Big Screen TVs such as LED, LCD, and
Plasma TV. The focus shifted from traditional semiconductor to digital media. It paid off and
they ranked 1st in the segment with 32% shares all over. The differentiation focused strategy
can be found with the unveiling LCD 57 inch TV in 2003 that no one ever brought into

Running Head: Samsung Global Marketing Operation 6
market till then. The impact of new product introduction with differentiation took a massive
sales growth of $15 billion in a year which never took place before. (Glowik 2016)
The revenue from Flash market (innovative product) which were once lagging Intel by $200
billion came down to only $50 billion within 2 quarters since Kim joining. The demand and
sale of LCD projected from merely 25 million units to 200 million units within 4 years span.
Alternative-2
Rebranding strategy particularly the campaign called ‘Digital All” campaign focused more on
empathy and sensitivity to connect with people. The new brand logo and tagline would help
the company to reframe consumer mind.
In the survey study on consumer’s thinking on brand provided the information that in all 4
nations (China, Brazil, Germany, and the USA), the product considered perfectly fit and
delight me among customers with respect to competitors. However, in all 4 nations, the
primary criteria or choice of customers was missing in the Samsung case. For ex: In Brazil,
perfectly fit was considered mostly for Sony not for Samsung whereas Samsung there stood
highest in reliant which was secondary. (Lacy et.al, 2016)
So from this end, alternative-1 is seemed positive for the company.
Qualitative analysis
Alternative-1- The decision to bring differentiation and introduction of the innovative product
is the core value of Samsung thus it exists within the scope. This can be a strength in the
future.
Alternative-2- Rebranding strategy may or may not succeed as a change of taste and
preference of people is unpredictable. Moreover, the rebranding of the whole product line is
impossible due to its corporate brand image.

Running Head: Samsung Global Marketing Operation 7
From this also, alternative-1 is found as a good strategy.
Application of Alternative-1 with SMART Framework
The alternative- 1 stated about shifting of the corporate strategy from the cost-focus to
product differentiation. To do so the following actions can be taken- (Cho et.al,2015)
Set the market first
Identify the emerging market first because in a saturated market the scope of differentiation is
lower. For ex: As China market or USA market is moving towards saturation, the focus
Samsung can be shifted to India, South Africa, UAE, Australia etc. where the electronic
market is emerging. Any new product should be commercialised first in these market.
Advertise differentiation, not product itself
Kim said that spending too much money on product ads won’t give a boost to sales. If the ad
is showing “What’s the difference” then people would relate more and will bring curiosity of
its use. Turn consumers into the experiencer. (Tse et.al, 2016)
Do It My WAY (DIY)
Instead of letting customer explore utility, show them what they can do with the product. This
way customer can relate their need to the differential product offering.
Let the customer decide the price
Don’t come up with a price for a new product but come up with the product or its prototype
with ads to create buzz for the product. Once the buzz about price based on utility goes
around, offer in that way. (Value -based pricing)
Is it SMART?

Running Head: Samsung Global Marketing Operation 8
Simple- Yes, Innovation is part of Samsung culture.
Measurable- Yes, by looking at increasing revenue and consumers.
Achievable- Yes, because customers are looking for new things with the changing time.
Realistic- Yes, with the existing R&D support and market research, this plan will work.
Time-bound- Yes, the strategic plan can be made for new product lines for next five years to
see results.

Running Head: Samsung Global Marketing Operation 9
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